Xi Jinping and Trump are having a bad year. Modi isn’t and he should capitalize on it during the G20 Summit
With heightened tensions between US and Iran, and India slapping tariffs on US exports, Modi will have to adopt a clear-eyed strategy at the summit.
Leaders from the world’s 20 largest economies begin their two-day G20 summit on June 28 in Osaka, Japan. Prime Minister Narendra Modi has several key bilaterals lined up, including one with US President Donald Trump. The Trump-Modi bilateral in Osaka will not have the easy bonhomie of Modi’s visit to the White House soon after Trump took office. By slapping retaliatory tariffs on US exports covering 28 categories of products, India has poked America in the eye. The new tariffs are not going to improve Trump’s mood during his meeting with Modi. For Trump, the key agenda with Modi is to wean Delhi off Russian military hardware, starting with the S-400 antimissile system.
Modi will stay firm pointing out that the deal is already done, advance payments made. Trump likes to use threats to bulldoze other leaders into accepting his trade deals. With India though, even Trump knows that this is a losing strategy. India’s strategic defence partnership with the US to co-patrol the IndoPacific is far too important to sacrifice at the altar of trade or Russian defence hardware. Besides, India is also buying tens of billions of dollars of advanced US military hardware, including predator Guardian drones and Apache attack helicopters.
Trump’s attention will wander quickly in Osaka to the two men whose alliance poses the real danger to the West: Russian President Vladimir Putin and Chinese President Xi Jinping. Xi and Trump share a curious relationship. Both are bullies by nature. Xi is the most powerful Chinese leader since Deng Xiaoping. He has made China even more authoritarian than it was under Deng. With Trump though, Xi is playing a game of geopolitical poker. He made it a point to visit North Korea just ahead of the G20 summit. The message was directed at Trump: if you want Kim Jong Un to fall into line over nuclear weapons, back off on trade tariffs. Before setting off for Osaka, Trump was bent on hectoring Xi on trade, threatening to impose 25 per cent tariffs on Chinese exports valued at $325 billion in addition to the $250 billion worth of Chinese exports already under 25 per cent tariffs.
After Xi announced his two-day visit to North Korea — the first by a Chinese president in 14 years — Trump changed his tune. He took a call from the canny Xi and promised an “extended” bilateral meeting with him at the G20 summit. A bargain may well be on the table with Xi delivering a more cooperative Kim Jong Un to Trump in return for a trade deal.
Meanwhile, tensions with Iran are rising. The Strait of Hormuz, which connects the Persian Gulf and the Gulf of Oman, is a tinderbox. Over 20 per cent of global crude oil and 33 per cent of liquefied natural gas (LNG) shipments pass through this narrow strait. Tehran’s nuclear gamesmanship could disrupt oil supplies and send crude prices soaring. Amidst global tensions and conflicting agendas, Modi will have to adopt a clear-eyed strategy. With Trump, he should stress the long-term benefits of the India-US relationship rather than getting bogged down on trade and other irritants like punitive action on US audit firms over discrepancies in the balance sheets of Infrastructure Leasing & Financial Services group companies or about data localisation of US firms.
Minister for commerce and industry, Piyush Goyal, said in the days leading up to the G20 summit that such irritants would be resolved. Equally crucial will be Modi’s meeting with Xi. The two men are likely to meet again in Varanasi in October, in continuation of the “Wuhan Spirit”. China’s softening stand post-Doklam is a collateral outcome of the pressure Washington has exerted on Beijing not only on trade but on Chinese companies like Huawei. The telecom giant is set to lose $30 billion in annual revenues on account of the US ban. With Huawei likely to bid for India’s 5G rollout, Modi will find himself in a delicate position in Osaka. Trump will press him to keep Huawei out of India. Xi will press him to do the opposite.
India’s 1 billion mobile phones are too large a market for Huawei to forgo easily now that it has lost access to the US telecom market and been removed from Google, Facebook and other US platforms on security grounds. Modi must focus on driving his own deals with China and the US. From China, in return for India’s support on trade and Huawei, ask Beijing to end protection of Pakistan-sponsored terrorism. From the US, in return for Indian concessions on data localisation rules and acquisition of more US military hardware, ask Washington to stop the skirmish over Indian tariffs, H1B visas and procurement of defence equipment from Russia. Trump faces a tough re-election campaign in 2020. In contrast, Modi will be in office with a commanding majority till 2024. Xi has appointed himself President for life, but faces a backlash in Hong Kong and among disgruntled elements in the Communist Party of China.
Neither Trump nor Xi are having a particularly good year.
Modi is.
He should make that count in Osaka.
Courtesy of Mail Today